Does anyone know if December's earnings, though not paid till January, are taxable as 2006 income or 2007 income?
Are you sure? Because Yahoo says "Your 1099 tax form will be mailed before January 31st, 2007 if you have been issued payments in 2006 that total or exceed $600." They are saying issued payments not revenue earned. That's why the confusion. I guess I can ask my tax guy, but was throwing it out there for any publisher who may already know from 2005.
You aren't taxed on what you make by what month you make it, you're taxed when you receive payment. So December earnings will show as 07 earnings and therefore you won't be taxed until the next tax time comes around for it. Hope this helps.
If the payment was in your posession on December 31st, 2006 at 11:59 PM in your local time zone then you have to claim it in your tax return, if not then you can claim it in next years return. If theres a discrepency between your return and Yahoo's 1099 form then you can just clarify if someone from IRS asks, and say that is not the amount that you received in 2006.
it depends of where you live. In France, you pay the tax for everything is on bills emitted during the year, but a lot of compagnies pay bills 1 or 2 months after reception, so you can have a discrepency between what you really have in your pocket and what you have to declare to IRS by the end of the year. Fortunately, the tax form is filled in march, so you should have received all the money at that time
IRS works on cash basis.. in other words they recognize income when you actually get the money.. so if you did not get money in 2006 then you do not have to include them in your tax return for 2007
Like soccerfriend said, people usually use a cash basis for doing taxes. If you want the full gory details see: http://en.wikipedia.org/wiki/Accounting_methods